LIFTS Episode 88 - From Bond Trading to Fitness Tech: Lauren Foundos' Journey

23:17I said E-Gym when I started the whole sentence. from a very different perspective. Look, we have a couple of really important stories to cover today. I want to start by this because I think it's a fantastic idea. We've all heard what Planet Fitness has done some really smart marketing campaigns, one of which I love has been, which maybe members don't love as much, but is free gyms for college and high school kids during the summer, free access to Planet Fitness. It is such a great tool to get people and kids into the gym following healthy habits, but it's a great acquisition tool as well because once they graduate college or after the summer, they're at their local, once they go back to school, they're going to look for a local Planet Fitness and join Planet Fitness.

24:01So I love that. What Crunch Fitness is doing, they just announced this, that August 30th, they're going to roll out a full free day of personal training sessions. It's about, they're calculating it to be 1.6 million in terms of value of personal training sessions across all clubs. So here's why I'm a big fan of personal training. Even though everyone on this call, we were athletes at one point, we all trained and had coaches and all the things. But do you know how many skills I've learned by having a personal trainer? Kettle pels, swimming better, learning new things. I mean, personal trainers have really evolved my fitness and continue to push me.

24:39And we know being in the industry, the reason why we care so much about personal training is because we know that once you're in, even if you have just once a week of a session with personal trainers, you are two to three X more likely to stay as members. but as an industry, we've done a poor job in converting them, right? Unless you look at a premium club, like an Equinox or a Lifetime. So as an industry, less than 15 % of gym members, and this is not, you know, during their lifetime, would have actually engaged in personal training. And PT can generate 20 to 30 % of non-dues revenues for gym.

25:17I mean, it could essentially, when you look at some of the margins that these gyms run, it could make or break the gym. So when I look at Crunch, they've got 2.4 million members. They're doing a phenomenal job, recently got acquired, 430 clubs across the country. So even an uptick in PT by 2 % could mean millions of revenue upside for them. And it's also not just about, I think, the PT revenue. It's also about members are going to feel less intimidated. Imagine, you know, if I'm not a member of Crunch or if I'm a new member of Crunch, I'm taking advantage of that. Because number one, I could have a friction to price, or I could be intimidated and not want to try.

25:56But this gives you a chance to really go see the value of personal training, which is so undervalued in our industry today. So I think it's key. Matthew and I, back in the UK with Performix Live, we did a whole Lyft live session with Richard Boyd to really unpack the value of personal training. So I love this in terms of what Crunch is doing. Matthew any thoughts on this?

26:21Matthew Januszek:I think as you said everybody knows the value of personal training it's something that gyms have continued to try and figure out how to get more people doing personal training I think the percentage of people that are doing it is as long as I can remember has always stayed around this sort of 15 percent you know 10 to 20 percent and average around about 15 I know when we spoke to Dave Minton in the past a number of times, he's always gone on that everybody in the gym should have a free personal trainer because if they had a personal trainer, they would come back and they would reach their exercise goals.

27:01Matthew Januszek:But it seems as though there's not been any significant changes in that space for a long time. And I kind of, I wonder why, but when, if you look at some of the stuff that's happening now on Instagram, for example, I think what you're starting to see is a, is a reinvention in some ways of personal training. A lot of this is through the digital format, but, but what I think they seem to be doing that some of the gyms haven't probably tapped into is, is that there's this sort of hyper personalization where they're, they're really sort of, you know, I'm getting stuff that's for a guy and all of the challenges that guys are facing.

27:43Matthew Januszek:And the one I saw last night was there was this, you know, fairly clearly successful trainer. And he was, he was, he was going after executives that wanted to look great in the boardroom, wanted to have energy as a, as an entrepreneur, wanted to sort of continue to be. You guys are in total children. Matthew's targeting you for that.

28:09Matthew Januszek:you wanted to sort of look attractive uh you know girlfriends wives or whatever it was you were trying to sort of attract and it but it was super targeted and and the whole language and the videos and the and the sort of you know the posts on the page really you know i i wouldn't have gone for it but i was actually you know i clicked on it i started to follow because it got my interest and i think the challenge with with gyms some of these big gyms that have always been successful in personal training is that they're, you know, it's, it's, they're trying to sort of tell a story to so many different people, men and women for a start, you know, totally different.

28:43Matthew Januszek:And then you break that down into, you break that down into sort of different age groups and women with children, women without children, like there's so many different demographics and people at so many different stages of life that would be interested in personal training. I think that's the challenge. And I think you're probably going to get more of these specialized companies that are going to do a really good job. And they're probably going to be able to charge a much higher price because they really sort of niche down on a particular demographic. That's kind of my view on the situation. But I think what Crunch has done is a great idea and certainly got a lot of respect for the campaign that they've put forward.

29:24That's what we see works exactly that on the content side is going after these niche audiences, speaking directly to them. So instead of saying you should do strength training, which is good for everybody, it's like if you're on GLP ones, then it's good for you. If you're going through menopause, it's good for you. Right. Like and going to those audiences that poses just saying strength training is good, which it is good for everybody. But talking about the thing they're going through, I think speaking to those audiences definitely having an impact and getting people to sign up that wouldn't otherwise be interested in strength training, for instance, in the case of menopause.

29:53So I think that's that's definitely working. The other thing I think you touched on is, I mean, if you do the same thing every day, you're going to get the same results. So we're staying at 15%. And it's like, you know, I think things have to change. Now we have a lot of other tools like technology. So one of the things, most of the gyms have an onboarding process that includes a health assessment, a scan, one free private training session, they all offer this. And when they do that, the retention of those members is much higher, but the uptake is only 15%, right, that end up doing these training sessions.

30:22And so I think, is there a way to offer that in a digital capacity where they can do the body scan and health assessment from their phone at home? And then when they get those results and you're like, now what? You can click on it and ask to speak to a trainer. So I think there's ways that gyms now need to start thinking about integrating that onboarding experience through their phone once people aren't ready to do it, getting them to do it, and then hitting those people again. Because once you get that information, then you don't know how to take the next step. So I think there's a big opportunity for gyms to utilize digital in increasing those numbers.

30:53Well, next, I saw an interesting article on Fit Insider about the boom of Pilates. I feel like we talk about Pilates almost every episode. Oh my God, every day. And there is like no stop to Pilates, right? So let's just talk about one of the fastest growing segments in fitness, in boutique fitness. I would say in fitness in general, which is Pilates. We actually had Michael Ramsey on from Strong Pilates in last week's episode, which came out fantastic. But here are some numbers. Club Pilates is now Exponential's largest brand because they divested from Stride and Row House and Rumble and Cycle Bar too.

31:31Yeah, thanks for that. But they have over 1 ,000 studios, Club Pilates Studios worldwide. ClassPass reported an 80 % year-over-year growth in Pilates bookings in 2024, and it's actually trending the same direction this year. Then you've got the hybrids that we talked about, strong Pilates, which blends Reformer with Cardi. So overall, the Pilates and Yoga student market is projected to hit$384 billion by 2030. So it is blowing up across all demos. My 80-year-old father is doing Pilates. I was going to say, older consumers. Totally. It has, like, it's low impact. It's effective. It addresses longevity.

32:13So I think that's what makes it, you know, fascinating. I've gotten into Pilates. We've got, Matthew, we've got to get you. You've never done Pilates. I think we've got to. I'd like to be there for your first class, if you don't mind. We should do it. Yeah, we should definitely do it. Yeah. Because it's accessible. I guess, you know, the question for you, I'll start with you, Lauren, is, and this hyper growth continue, are we heading for oversaturation like we've seen with cycling or others? Do you think it's going to stay hot or is this like a trend that's going to fade it off? I think, you know, the fitness industry goes through a lot of cycles.

32:47One of the ways that we're thinking about it as echelon is like actually creating a foldable reformer for, so gyms are buying reformers and those machines are huge. When and if this trend, you know, will evolve in some regard. What are they going to do with those giant machines and how do they, you know, keep evolving? Club Pilates actually has a class that's reformer TRX and off of it too. So they're iterating in ways where it's still highly centered around the reformer, but they're iterating those classes. So I think from the equipment side, that's how we're thinking about it. But I do think the point you brought up, Mo, is that because I wear a wearable and all of us do.

33:24We wear them all. And so I think my wearable is basically telling me I'm overstraining myself. It wants me to chill out. It's like ratcheting down my activity goal the minute after I get back from the gym. And so I think for me, that's been pretty eye-opening that those workouts are really not what I need. I need to actually slow myself down and do different kinds of workouts. It's rewarding me for that. So because I'm hyper aware of that, I do think that even if the trends change and they will, because they always do, I think there is a, now that we're seeing that type of data, I think people are going to gravitate to things that, you know, that that's giving it positive feedback to.

33:59And for me, that's doing more low impact, like low key workouts, as opposed to, you know, the things I was doing before, which was, you know, brutalizing myself. So I know Mo works out pretty hard still. So I would say our wearables probably giving us the same feedback. So I had to take a guess and then Matthew, all of us.

34:16Matthew Januszek:If you've been around, you know, in the industry for quite a while, as you said, Lauren, these trends come, they peak, they level out, and in some cases, they decrease. They don't always go away. You've seen, I've probably in my time in the career of seeing group cycling peak like three times and crash after every one. But I think it's naive to assume that this will continue to grow. And I think what people, whether they're manufacturers of equipment or technology or or bricks and mortar locations is it's really just understanding where we are on that curve in each market and just making sure that there's an awareness that things don't go up forever and figuring out how to time investment, how to understand when the market is going to consolidate and how to position yourself to deal with the inevitable leveling off and to ensure that it doesn't take you out because I think it you know it's even like the stock market you know most people jump in when everybody's talking about it and that's probably the worst time to get into the market you probably know that better than anyone Lauren from what you used to do and I think it's just just sort of you know I'd love to be able to look at some of the data that comes out there and who's behind it and who's sort of hyping the story but it'd be great to sort of figure out on all these different trends that we speak about a long time.

35:46Matthew Januszek:You know, exactly on that curve, where are we in terms of the average sort of life cycle of the business? And when do we need to be really careful about, you know, sort of waiting until, you know, the inevitable happens and then jumping back in when there's, you know, opportunities. Shifting to our last story here, and this is pretty big news. Matthew, we've been talking about these ring wars now for, I think, a long time. We both have Aura rings on. So this is pretty big news in that Aura just scored a major legal win against Ultra Human, who I'm also friends with, and RingCon by the U.S. International Trade Commission.

36:31So they ruled that both UltraHuman and Ring Kong infringed an Aura's patent, things like a curved battery design, integrated sensors, and the ring form factor. So here's the big news. As a result of this, UltraHuman's Ring Air and Ring Kong are banned from being imported into the U.S. after October 2025. So it essentially has completely sidelined two of Aura's competitors in its biggest market. And the case also got a little bit messy. UltraHuman was called out for falsified evidence, claiming that they had a Texas factory to build rings in the U.S. when they apparently did not. And the impact is pretty large.

37:11So Aura sold about 2.5 million rings, raised$350 million, valued at$2.5 billion. I think that's going to go up. Actually, I think as the last one, they might be at$5 billion with the Dexcom investment. They currently control almost 70 % of the smart ring market, which is projected to be nearly a billion dollars by 2030. So there's a big reason for everyone being heavily invested in this. And with other human and RingCon and potentially other sidelined, at least the Samsung Ring maybe is a competitor, sort of, but I haven't seen much around that. One thing for me is that this case is really highlighted, and I always stress on this, is the power of IP.

37:50I always think about IP, IP, IP. And on one hand, it protects innovators and people that come up with the original design. On the other hand, fewer competitors in here could mean you could command higher margins and you could slow down innovation, which might not always be a good thing. But again, this is why we have laws and rules. But it's not over. ultra human filed a countersuit in india so this thing is only going to be noshed up another level claiming that aura copied their woman's health and glucose features and calling or's uh subscription model anti-consumer this is just like getting get messier and messier so the fight is not global but i think or is going to celebrate this victory so lord i want to start with you as someone who's built tech in this space just would be curious to get your thoughts i mean do you think or is win cements its dominance?

38:42Or do you think it validates, you know, the ring modality? I think it validates the ring modality, obviously, and they have a big leg up. I think these battles often become expensive and the lawyers win big in the end. And so, you know, they have a lot of money, but I think that at the end of the day, they have a big leg up. They have really innovated in these communities. I think it is important to get these things, but at times it can become a distraction because they do have that momentum and they are the leader. So, you know, I could kind of make a play for both of those things. But I do think tracking of data and all of these things, people that I'm friends with that don't work out, they're interested in these types of things.

39:24I have friends that are using it because they're trying to get pregnant and they're not trying to use birth control and they're using it for all these different reasons. And as a result of wearing the ring for other reasons, they are now fascinated by working out. They're seeing their movement goals. And so I think for the industry, it's a really beneficial thing. And I think it's getting to more consumers than the person that's going to wear a garment or wear a watch and interested in tracking their workout. So I do think that these things have a net positive effect for the overall industry, for sure.

39:51Matthew Januszek:You know, from my perspective, I saw this superhuman product. I know, Mo, you're connected with them. So I don't want to offend any of your colleagues or anything there. But when I saw the products at CES, you know, I remember talking to the guy. I think one of them was an Indian guy. And I think they, from what I remember at the time, they seemed to get quite a lot of traction in India before they did in America. But for me, if you're leading an organization, you clearly raise companies that are in this position would have raised a lot of money, that have had some really good lawyers, patent lawyers that have looked at the IP of Aura.

40:27Matthew Januszek:And my perspective is that I think they took quite a risk and they probably hoped that they would go through some, it was inevitable that there was going to be some form of litigation. And my guess is that they'd probably hope that through litigation, they would have been able to sort of make this work. But I still think it was a very bold move to go after Aura, probably a little bit naive to think that they could have probably won if they really did their due diligence and maybe not advisable if you are going to develop a company to to think of a strategy where you're going to go up against somebody like that so yeah for me i kind of felt as i saw that coming i think congratulations to aura i think they deserve to to have sort of won that that that position and um i would just be curious to speak to people at superhuman you know, behind the scene, ultra human, sorry, if they were sort of honest about what their real strategy was, because this clearly wasn't an accident that they didn't know about it.

41:32Matthew Januszek:Yeah, I think there's a good business case in this. And certainly for smaller companies like all of us, where you're, you know, you're going into new markets, you see an opportunity. Mo, you and I have talked about these sort of sports rings, and I'm sure there's lots of gaps in the market that Aura aren't in, but, you know, they've almost gone straight head-to-head with these guys and lost. Yeah, I would agree with that. I'm always a fan of competition as well and hoping that this is not insightful innovation. But look, I think on the wearable category, we're going to see things near your, things that will be on your arm.

42:08There's going to be so much innovation to happen that I think we're going to be okay. We're at time. Lauren, one of the things that, I know you are a listener, but one of the things that we like to do to end the episode is just to do a final takeaway. So I want to start with you. Do you have any key takeaways from what we spoke about this week? For me, the takeaway that I've been just feeling as I've been having conversations with businesses is really just focusing on how you're going to integrate all this technology into your ecosystem, how you're going to charge members for that experience. And think about, you know, having an app and having all these different things is a whole different business model.

42:43and if you don't price things properly and put value to it, then I think you end up struggling to succeed in that. So I think thinking about pricing for all of these valuable assets that are now out there, whether it's integrating wearables, offering different types of software to your members' health assessments and how that business model is going to look, I think that's the most important thing to think about and maybe that isn't including everything into one bundled price. That's something I think about. I would appreciate that. Matthew?

43:16Matthew Januszek:We've covered a lot. It's been an interesting conversation, Lorna. Thank you for joining us and stimulating our little brain cells. But I think all I can probably comment on is maybe the last story, which is fresh in my mind, because that's kind of stuck with me a little bit. And I think in general in business, you sort of look at what a lot of people are doing and you look at what a lot of big brands are doing. And in some cases, they provide inspiration and motivation and direction. But in a lot of cases, just because they're a big company and they've been successful and raised a lot of money, it doesn't always mean that they really know what they're doing.

43:59Matthew Januszek:And probably caution before sort of following some of these big trends, because maybe they've not got it right. And maybe you have. I want to know if you signed up for that influencer ad that you got. Did they get you at the end of the day? Are you doing the corporate? I registered for the page. I've not signed up for the personal training thing, but I may do. I felt like you kind of hooked you. So that's worked. I think that's evidence right there that targeted marketing is something that everyone should focus on. Well, I think for me, for the second week in a row, I'm going to pick a topic that we did not talk about.

44:38But you all know that I love geeking out on research and data and looking at data that no one really looks at just because, I don't know, honestly, it puts me to sleep too. That's what I do at night. So I came across this data, which I've been following since I've had networks for about 14 years. But there's a survey that we do every year called the American Time and Use Survey. It's publicly available, ATUS. Anyone can go look it up, and I encourage you to do so. But something really interesting happened in this year's survey. and the data is really compelling. So for the first time in decades, and let me take a step back, everyone, and we all travel internationally, thinks that America is the fattest country on earth.

45:18Okay, well, that is still true. We have the highest obesity rates in the world. However, we are not increasing our rates of obesity now. So for the first time in decades, our obesity rates have actually gone down and they're showing decline, which is incredible. So this American Time and News survey reported -

45:37Matthew Januszek:GLP-1 then, do you think? I think that's a part of it. Or once you hit 100, it has to only go to the cost. Well, I'm going to give you some interesting facts here. So Americans, and I did a LinkedIn post about this as well, Americans now spend 32 minutes per day in exercise, which is up from 20 minutes a day in 2003. Income, which is interesting, still matters. As our average income goes up, higher income Americans are three times more likely to exercise than low-income groups. So we still need to fix that. And encouragingly, and this is something we all know, that nearly 40 % of new club members today are Gen Z and millennials.

46:16So here's where all this is important. I believe that we are entering what I'll just frame as our Starbucks moment in that, like coffee, is a daily ritual for most Americans. Like I wake up in the morning, first thing I have is my cup of coffee. I think like both of you. I think fitness is starting to become a default behavior, like coffee. And for the first time in decades, we're seeing data actually back that up. So I think this boom that we're seeing in fitness in America isn't temporary. It's really a foundation for long-term change. So I'm just excited about it. I encourage you to go either look at my post or pull up the report.

46:52But this is an incredibly exciting time to be part of this industry because it's not just us preaching to the same people over and over again, but we're actually seeing growth happen.

47:03Matthew Januszek:It'd be nice to put that data into something like chat GPT and then try and understand the amount of Americans that are on GLP-1s compared to that same period and sort of see if you could merge the data in. Maybe that's a little thing for you. I'll send you the link. That would be interesting. We should go look at that. I think, Mo, what you touched on is that it's moving from a luxury to something that people see as something that they have to do. Like the fact my parents who are immigrants who thought I was crazy for working out, join Stretch Lab, go to private Pilates trainers. Like, you know, they're just starting this habit now.

47:37They realize it's not just something that people with a lot of time and money do, but it's something that, and they're amazed. They're like, I'm getting stronger. My mom said she now uses a cowbell. I'm like, do you mean a kettlebell? But I think like, I think like that's showing, like, it's like even at their age, they're still learning that they're realizing that this is something they need to do. And I think young people, that's getting engraved in. And so I think that is a major shift that will only continue to open the market. And I don't think that's just a trend. I think that's here to stay for sure.

48:04Completely off topic, but the cowbell, Lauren, you and I grew up in the New York area. Do you remember that song from back in the day? Totally. That's got to be our outtake song for this. See if you can find that and loop that in somehow. Exactly. She does squats with the cowbell. I was like, this is why I love you. Just learning.

48:22Matthew Januszek:Well, that's it. Thank you very much. for thank you very much lauren um for joining us this week and um thanks thanks for listening if you enjoyed this episode please give it a like please subscribe if you haven't and share it with one or two other people uh thanks very much for listening

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